Yellen calls for global minimum corporate tax rate • Hacker News Board

Re: Yellen calls for global minimum corporate tax rate

#71

Post by Mc_Big_G » Mon, Apr 05, 2021, 6:30 PM UTC

ping_pong wrote: post #55

jokoon wrote: post #35

I believe that the pandemic will make world politics lean to the left. It's inevitable. Such a gigantic crisis will force society into mutual help, and will make it harder for values like independence and individualism to really thrive and endure. No man is an island. It's true that trade and entrepreneurship are a form of mutual help, but competition bring the worse, and it becomes the economy of the survival of the…

And yet, it didn't do that with the US. I'm frankly shocked that so many anti-maskers and covid-hoaxers are so adamant, because this was the perfect case for universal health care in the US. And yet, you hear NO ONE calling for it. It's like learned helplessness. There's almost half the population that actively rejects it, which is mindboggling to me.

IDK if you noticed, but half the population watches brainwashing "entertainment" disguised as "news", which actively pushes conspiracy theories and disinformation down their welcoming throats.

Re: Yellen calls for global minimum corporate tax rate

#72

Post by tootie » Mon, Apr 05, 2021, 6:32 PM UTC

godelski wrote: post #38

tootie wrote: post #19

Earlier quoted context omitted.

Inequality is simply inherent to capitalism. The free flow of capital, goods and labor will always see concentration happening. The issue is that it should be very possible to eliminate true poverty with reasonable redistribution policy. Capitalism (and Industrialization) have gotten us tantalizing close to a post-scarcity economy. We still need the last 1/3 or so of the world to get on the trolley while addressing o…

It sounds like you're just saying "pareto happens in any resource allocation scheme" which isn't specifically inherit to capitalism and is kinda just what happens when people have resources. I'm not convinced that people can live without resources. Sure, there are concerns when the distribution becomes too long tailed, but what you're describing is inherit to any system (we haven't seen a system where this hasn't hap…

I did not at any point imply that inequality was unique to Capitalism. And I'm not sure what you mean "live without resources". My point is that we have enough resources for everyone to live well even if some people have much more than others. I'm not trying to blame Capitalism for anything. I'm actually trying to say that we can achieve stability and social justice without having to abandon it. We just need a modicum of Socialist policy sprinkled in.

Re: Yellen calls for global minimum corporate tax rate

#73

Post by marcusverus » Mon, Apr 05, 2021, 6:32 PM UTC

cuspycode wrote: post #60

nonameiguess wrote: post #20

We need a global maximum, of 0%. I don't want to sound like some kind of hardcore Austrian fundamentalist, because I'm not. Taxes are fine, but levying them on fictitious non-person entities is just a means of obscuring to voters where the tax burden ultimately lies. All taxes are paid by individuals, either directly, or by corporations raising or lowering the prices they charge and prices they pay, to suppliers, emp…

Agreed. Instead of taxing the profit of a corporation, just tax the payment of dividends from that profit. The total tax burden can still remain the same if that's what people desire, but the end result will be more transparency as you say. I think Estonia has exactly this policy, or at least they did last time I checked. It also removes the incentive to mess around with stock buybacks, which is good because the extr…

> Instead of taxing the profit of a corporation, just tax the payment of dividends from that profit.

This would be regressive, though. Why not tax the individual via a progressive cap gains tax?

> It also removes the incentive to mess around with stock buybacks, which is good because the extra liquidity can be put to better use within the company.

If a company can't think of a good use for their profits, do we really want to force them to keep the money within the organization? This seems like a recipe for bloated budgets and bigger Christmas parties, but I'm not sure that we could expect much benefit otherwise.

Re: Yellen calls for global minimum corporate tax rate

#74

Post by yonaguska » Mon, Apr 05, 2021, 6:35 PM UTC

dnautics wrote: post #54

cutchin wrote: post #52

Earlier quoted context omitted.

I don't understand how this would work. You would tax corporations based on actual income? So money-losing businesses would have to pay taxes on their income even though they operated at a net loss? And low-volume/high-revenue businesses would pay less in taxes than high-volume/low-revenue would?

I am agnostic on if it should be based off of income or profit and leave those sorts of details up to congress.

> leave those sorts of details up to congress.

Yep, let's leave it to the "experts".

Policy "details" tend to have drastic unforeseen consequences, and our congress-critters tend to defer responsibility of those details to lobbyists.

We the Constituents\People\Voters have a responsibility to do our own thorough research and not allow Congress to figure out the details.

Precision matters and details can make all the difference between a good policy and a destructive policy.

Re: Yellen calls for global minimum corporate tax rate

#75

Post by legitster » Mon, Apr 05, 2021, 6:37 PM UTC

kinghajj wrote: post #64

legitster wrote: post #53

A corporate income tax is only slightly more progressive than a flat tax. A corporate tax rate of 0% but corporate income is passed through to shareholders as personal income seems better in every regard.

Isn't that just called a dividend? Or are you suggesting that shareholders owe tax liability for all earned corporate profits, regardless whether any of that is paid to them as a dividend?

Not only that, all income (but eliminate capital gains).

While it may sound a bit revolutionary, this is essentially the tax structure Milton Friedman endorsed.

Re: Yellen calls for global minimum corporate tax rate

#76

Post by yonaguska » Mon, Apr 05, 2021, 6:38 PM UTC

cuspycode wrote: post #60

nonameiguess wrote: post #20

We need a global maximum, of 0%. I don't want to sound like some kind of hardcore Austrian fundamentalist, because I'm not. Taxes are fine, but levying them on fictitious non-person entities is just a means of obscuring to voters where the tax burden ultimately lies. All taxes are paid by individuals, either directly, or by corporations raising or lowering the prices they charge and prices they pay, to suppliers, emp…

Agreed. Instead of taxing the profit of a corporation, just tax the payment of dividends from that profit. The total tax burden can still remain the same if that's what people desire, but the end result will be more transparency as you say. I think Estonia has exactly this policy, or at least they did last time I checked. It also removes the incentive to mess around with stock buybacks, which is good because the extr…

> just tax the payment of dividends from that profit

My dividends are already being taxed as income. I agree with you, but good luck trying to convince Big Gov that they need to eliminate a revenue stream without picking up a new one.

Re: Yellen calls for global minimum corporate tax rate

#77

Post by adventured » Mon, Apr 05, 2021, 6:40 PM UTC

dnautics wrote: post #30

nonameiguess wrote: post #20

We need a global maximum, of 0%. I don't want to sound like some kind of hardcore Austrian fundamentalist, because I'm not. Taxes are fine, but levying them on fictitious non-person entities is just a means of obscuring to voters where the tax burden ultimately lies. All taxes are paid by individuals, either directly, or by corporations raising or lowering the prices they charge and prices they pay, to suppliers, emp…

I'm kind of the opposite. We should have 0% personal income tax and a minimum corporate income tax. A personal income tax incentivises the state to surveil the economic activity of individuals and play games with nudging people to do X or Y, and puts the burden of tax filing and the consequences of not reporting (which some people just can't do correctly). Contrariwise, a corporate income tax can be thought of as a "…

Corporations don't generate enough profit to float a nation's tax needs.

Corporate profit in the US is generally somewhere around $2 trillion per quarter when times are very good. That's including all businesses, from mom & pop to Microsoft, and that includes all profit from global operations (not just domestic operations).

A 50% tax would only pay for just over half the US tax revenue needs (assuming you make the mistake of taxing global profits at 50% as well) and that would probably cripple the US economy. Many of the consequential corporations would attempt to flee (so you'd have to implement some form of government-sponsored slavery to keep people in). A 100% tax would immediately begin to collapse the US economy as businesses would no longer be able to save for any future purpose (including recessions, business problems, unexpected opportunities, and so on) and they would fail rapidly.

The only tax source large enough to support a nation is an income tax on individuals. That's why, for example, no nation in Europe has ever attempted to fund their expensive and well-experimented welfare states in the way you're suggesting. They know it doesn't come close to working.

Re: Yellen calls for global minimum corporate tax rate

#78

Post by [deleted] » Mon, Apr 05, 2021, 6:46 PM UTC

dnautics wrote: post #54

cutchin wrote: post #52

Earlier quoted context omitted.

I don't understand how this would work. You would tax corporations based on actual income? So money-losing businesses would have to pay taxes on their income even though they operated at a net loss? And low-volume/high-revenue businesses would pay less in taxes than high-volume/low-revenue would?

I am agnostic on if it should be based off of income or profit and leave those sorts of details up to congress.

[deleted]

Re: Yellen calls for global minimum corporate tax rate

#79

Post by ineptech » Mon, Apr 05, 2021, 6:49 PM UTC

jurassic wrote: post #51

ineptech wrote: post #25

Earlier quoted context omitted.

I think you're missing the point here. > "We're working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom." The race to the bottom Yellen refers to is corporations playing one country off another, as in "lower your taxes or we'll move our profits to Ireland." The proposed solution - countries agreeing with each other not to lower the corporate tax rate below some li…

I don't think it's fair to assume harmonized tax rates are mutually beneficial. Taking Ireland as an example, how many of the companies that shifted profits there for favorable tax treatment would continue to do that if they had to pay the same as they would in the US? My guess is relatively few would remain. So Ireland would likely lose revenue without that discount as an incentive drawing in these companies.

Without a harmonized tax, Ireland could also lose all of its corporate tax receipts to some other country that's willing to stoop even lower.

More generally, this is a variant of a mutual coordination problem in game theory, in which it is everyone's interest for everyone to cooperate, but in each individual's interest to be the only party that doesn't cooperate. Those are notoriously tricky to induce/enforce agreement on, but it has been done.

Re: Yellen calls for global minimum corporate tax rate

#80

Post by SomewhatLikely » Mon, Apr 05, 2021, 6:50 PM UTC

nonameiguess wrote: post #20

We need a global maximum, of 0%. I don't want to sound like some kind of hardcore Austrian fundamentalist, because I'm not. Taxes are fine, but levying them on fictitious non-person entities is just a means of obscuring to voters where the tax burden ultimately lies. All taxes are paid by individuals, either directly, or by corporations raising or lowering the prices they charge and prices they pay, to suppliers, emp…

I'm trying to think through the ways this could be cheated. For example, if I own a business then instead of paying myself and then donating to a 527 political issue group I could instead have my business donate to the 527. Since the 527 is tax exempt that money never got taxed, but if I had to take the money as income first I'd have to pay income taxes. I'm sure there's other ways to take advantage of a zero percent corporate tax, or indeed even the lower-than-personal corporate tax rate already in place.